Angel Broking has maintained `Buy` on Graphite India with a price target of Rs 102 in its report dated Feb. 15, 2012. The broking house gave the following rationale:

Graphite India (GIL) announced its 3QFY2012 numbers. The company`s net sales increased by 29.2% yoy to Rs 4.36 billion (Rs 3.37 billion). The graphite segment, which contributed around 85.6% to the total revenue, registered strong growth of 27.1% yoy to Rs 3.73 billion (Rs 2.94 billion), while the steel segment managed a 15.8% yoy increase to Rs 300 million (Rs 260 million). EBITDA increased by 21.1% yoy to Rs 890 million (Rs 730 million), largely due to higher revenue.

EBITDA margin declined by 137 bp yoy to 20.3% (21.7%), mainly due to higher raw-material cost, which increased to 42.6% of net sales in 3QFY2012 vs. 40.2% of net sales in 3QFY2011. PAT increased by 27.1% yoy to Rs 560 million (Rs 440 million). Despite a 137 bp OPM contraction, PAT margin only declined by 21 bp yoy to 12.9% (9.1%) due to lower tax provision and higher other income.

Tax rate declined to 32.1% of PBT in 3QFY2012 vs. 33.2% of PBT in 3QFY2011, while other income increased by 96.8% to Rs 70 million in 3QFY2012 vs. Rs 40 million in 3QFY2011. We will be coming out with a detailed report post management interaction. We continue to maintain our `Buy` view on the stock with a target price of Rs 102.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.